October 2012 Archives

A common theme in much of the political rhetoric during both this election cycle and the last four years has been complaining about China as a "currency manipulator." The truth is that China has kept the value of its currency artificially low, thereby increasing the cost of U.S. exports to China and decreasing the costs of U.S. imports from China. Just like a coin has two sides, it is clear that changes in value of the Chinese currency simultaneously helps some groups while it hurts others. The novelty is that much of the media and political focus has been on the U.S. groups that get hurt by this policy, while stories about the benefits are neglected. And it is likely that the benefits outweigh the costs--possible by a landslide.

Time to repost the most recent Deseret News article from yesterday.

As many observers expected the U.S. Federal Reserve began a new round of quantitative easing this fall in an attempt to stimulate the economy by increasing the supply of available money.  As I discussed at the beginning of August, there is no fundamental difference between quantitative easing and the Fed's normal open market operations.  In the latter case the Fed buys U.S. Treasury securities on the bond market and in the former case it buys other non-traditional financial assets.  In both cases, however, it pays for these purchases by creating money.

From the Deseret News this last Tuesday.

A few years back I volunteered at an archeological site in Range Creek, Utah.  I learned that archeology is arguably the most interdisciplinary subject in the world.  And I learned that I don't have the eyesight or the tolerance for dust needed to succeed in that field.  I also learned an interesting lesson about the interesting ways that economic thinking can inform our understanding of societies, even ones that leave no written history.

Ryan Decker is a former BYU student who worked for Kerk Phillips and me. He is now a PhD student at the University of Maryland and is on the research staff of the Center for Economic Studies at the Census Bureau. He posted this very interesting picture.

If you look at new firms, they are adding the most workers and shedding the least. But that is by definition. What is interesting is that it is the middle aged firms (Age 4) and the old firms (16+ years) that have been the source of the vast majority of the job losses over the last 5 years and in every economic downturn in the labor market back to 1988.


  • Richard W. Evans is an Assistant Professor of Economics at Brigham Young University

  • Jason DeBacker is an Assistant Professor of Economics at Middle Tennessee State University

  • Kerk L. Phillips is an Associate Professor of Economics at Brigham Young University